Jet Airways (JAI, Mumbai International) founder and Chairman Naresh Goyal has agreed to reduce his stake in the carrier to 22% and step down from the board, paving the way for an Etihad Airways-led restructuring, the Business Standard has reported.
Goyal currently holds a 51% stake. His future role has been a major obstacle in the negotiations with the Emirati carrier, who wanted Goyal and his family members out of any executive positions at Jet Airways.
Following a fresh capital injection, according to the plan Etihad Airways would increase its stake from the current 24% to 40%. A consortium of banks led by the State Bank of India would convert a part of Jet Airways' debts into equity and would consequently hold a 30% stake in the airline.
The airlines are expected to ink a Memorandum of Understanding within days to finalise the deal. Subsequently, Jet Airways' shareholders will have to approve it at a general meeting scheduled for February 21, 2019.
Meanwhile, Jet Airways continues to delay payments to pilots. In January, it was due to cover the missing 25% of the October wages and 75% of the November wages. While it cleared the debt for November, it paid only a half of what was due for November. In a communique to the pilots, the airline said it was "actively engaged" with stakeholders and was "very close" to an agreement on the restructuring, The Economic Times has reported.
For its part, the State Bank of India said that any capital provided to Jet Airways would be treated under the scope of the Sashakt scheme, a government-initiated initiative to deal with bad loans plaguing the Indian banking sector.
Jet Airways currently has over INR80 billion rupee (USD1.16 billion) in debt. After the carrier defaulted on some of its loans on January 1, 2019, it has 180 days to come up with a detailed restructuring plan.
